The central government on Wednesday gave its approval for the ratification and submission of articles of agreement of the Asian Infrastructure Investment Bank (AIIB).
"Establishment of the AIIB will help India and other signatory countries to raise and avail resources for their infrastructure and sustainable development projects. India is one of the largest potential borrowers of AIIB's resources," the government said in a statement.
According to the statement, India stands to become the second largest shareholder of AIIB after China. "This is a historic opportunity for India to play a prominent role in the governance of a multilateral institution."
It is expected that with membership in AIIB, India would be able to raise and obtain more resources for much needed infrastructure development.
Infrastructure financing in India has traditionally been done through the government and existing multilateral development banks. These have been supplemented by public sector contributions through public-private partnership projects.
However, in the context of fiscal consolidation and risk-averse private sector, the AIIB will make additional resources available. This is expected to recycle the savings accumulated in emerging countries, the government said.